Dear Momentum Stocks Weekly Subscriber,

The Federal Reserve left interest rates unchanged on Wednesday, and Fed officials made sure they pleased Wall Street with their rhetoric. The news pushed the market to fresh session highs, as the bullish clues that were left ahead of the announcement played out as planned. More importantly, the VIX closed below 15 for the first time this year.

The Dow jumped 74 points, or 0.4%, to end at 17,325. The blue-chips traded down to 17,204 shortly after the open, with rising support at 17,200 holding. Backup help is at 17,000-16,900. The run to 17,379 late in the day tested upper resistance at 17,350-17,400, and I have been mentioning that a close above the latter would get 17,600 in the mix.

The S&P 500 added 11 points, or 0.6%, to close at 2,027. The index opened at 2,014, with the bears pushing a low of 2,010 ahead of the Fed announcement. The bulls defended support at 2,010-2,000 before making the rebound to 2,032 ahead of the closing bell. Resistance at 2,025-2,050 was breached, and the close above the former was a bullish signal.

The Nasdaq advanced 35 points, or 0.8%, to settle at 4,763. Tech gave back a 12-pack and fell to 4,716 intraday, with support at 4,725-4,700 holding. Upper resistance at 4,775-4,800 came into play following the move to 4,774 late in the day. A close above 4,800 would be a very bullish signal.

The Russell 2000 climbed nearly 8 points, or 0.7%, to finish at 1,074. The small-caps held support at 1,060 following the opening dip to 1,063. The index mostly held positive territory into the Fed update before powering to a high of 1,076 afterwards. The rebound into the 1,070-1,075 zone looked bullish, but it will be wasted if there is no follow-through past 1,080 today.

The S&P 500 Volatility Index ($VIX, 14.99, down 1.85) fell 11% after trading to a low of 14.89. While this move was of major significance, I also realize that a market peak could be near if the VIX fails to hold at this level for several sessions. If it can, a test to 13.50-12.50 could be in store. Fresh resistance is at 16.50-17.50.

From desk to press, futures look like this: Dow (-41); S&P 500 (-5); Nasdaq 100 (-15); Russell (-4).

Chapter 1. Momentum Stocks Weekly Play List

All prices given in this update are current as of Mar. 16, 2016. I hereby disclose that I will be participating in the following trade(s).

The Momentum Stocks Weekly Closed Trade Track Record is 1-4, for a 20% win rate for 2016 (145-29, or 83% win rate, overall since the start of 2011)

View the entire list of open and closed trades by clicking here.

 

Hansen Medical (HNSN, $2.68, up $0.13)

Original Entry Price: $4.50 (2/2/2016)

Lowered Price from Selling Options: N/A

Exit Target: $6.00

Return: -40%

Stop Target: $2.00

Action: Resistance is at $2.75-$2.80 and the 100-day moving average. A move above this level would be bullish for a possible run past $3.00. Support is at $2.50-$2.35 and the 50-day moving average.

 

Lattice Semiconductor (LSCC, $6.02, up $0.12)

Original Entry Price: $6.77 (12/29/2015)

Lowered Price from Selling Options: N/A

Exit Target: $9.00

Return: -11%

Stop Target: $3.50 (Stop Limit)

Action: Resistance is at $6-$6.25. Support is at $5.50-$5.25 and the 50- and 100-day moving averages.

 

Planet Fitness (PLNT, $15.00, up $0.09)

Entry Price: $17.85 (9/16/2015)

Lowered Price from Selling Options: N/A

Exit Target: $22.00

Return: -16%

Stop Target: $12.00

Action: Resistance is at $15-$15.25 and the 100-day moving average. Support is at $14.50-$14.25.

You can read my write-up on PLNT in the Nov. 16 Issue.

 

Rave Restaurant Group (RAVE, $5.60, up $0.05)

Original Entry Price (First Position): $13.92 (7/9/2015)

Lowered Price from Selling Options: N/A

Exit Target: $20.00

Return: -60%

Stop Target: $4.00

 

Original Entry Price (Second Position): $11.70 (8/17/2015)

Lowered Price from Selling Options: N/A

Exit Target: $13.00+

Return: -52%

Stop Target: $4.00

Action: Resistance is at $5.50-$5.75 and the leveling 50-day moving average. Support is at $5.50-$5.25.

You can read my most recent write-up on the company in the Dec. 24 Issue.

 

Psychemedics (PMD, $14.16, down $0.01)

Original Entry Price: $15.67 (5/5/2015)

Lowered Price from dividends: $15.07

Exit Target: $15.25 (Limit Order)

Return: -6%

Stop Target: $13.00 (Stop Limit)

Dividend Yield: 4.2%

Action: Resistance is at $14.50-$15. Support is $13.50 if $14 fails to hold, with backup and our Stop Limit at $13.

 

Huttig Building Products (HBP, $3.76, down $0.05)

Original Entry Price: $4.00 (8/13/2014)

Lowered Price from Selling Options: N/A

Exit Target: $4.15

Return: -6%

Stop Target: $2.00 (Stop Limit)

Action: Resistance is at $3.80-$3.90, and a move above the latter could lead to $4.00 or higher. Support is at $3.50-$3.40 and the 200-day moving average.

 

Trades on Hold (2): These are trades that are still open in the portfolio but are down from the original recommended price. These trades are on “hold” and are not a buy until I bring back coverage of the stock. This means I would not open any new positions. I’m still keeping track of the trades and will record the results accordingly when a trade closes. I do not recommend adding to these positions or opening new positions.

Zynga (ZNGA, March 2014) — Continue to hold.

Relypsa (RLYP, January 2015) — Continue to hold.

Trade on!

Signed

Rick Rouse
Editor
Momentum Stocks Weekly